AT&T SPENDING BIG BUCKS ON AIR AFTER T-MOBILE FLOP
Yes. AT&T just spent a whopping $1.9 billion on thin air. Well, airwaves to be exact. The license for the 700 MHz spectrum that was previously owned by Qualcomm, to be exact. So what does this meant to you AT&T customers, exactly?
Well, for starters, we all know that the T-Mobile acquisition on behalf of AT&T was a resounding failure. Thanks to competitors crying “foul” and the government calling “monopoly”, the deal didn’t go down. That ended up costing AT&T a nice sum of $4 billion in promised damages to T-Mobile just in the case that the merger didn’t go down.
Why did AT&T try to buy T-Mobile? Because they don’t have the bandwidth and infrastructure they need to give us data hogs all we want, and in order to compete with Verizon Wireless and their nationwide 4G LTE network. There’s no way AT&T could grow fast enough to compete with Verizon the old fashioned way.
Now that the deal with T-Mobile has been flushed swiftly down the toilet, AT&T had to look to other means to expand their ability to serve up all of the network demand to meet customer’s surfing needs. The solution was buying up the 700MHz bandwidth range from Qualcomm.
The fact is, you can only jam so much data through the existing licensed AT&T bandwidth range. It’s like reaching the limit in an area where you have more radio stations than what the dial can squeeze in. That’s why they bought up the unused 700MHz spectrum from Qualcomm.
Qualcomm had previously used this bandwidth for their “FLO TV” product that bit the dust. This was a service that was supposed to bring television viewing to smartphones. AT&T will now use this to expand their ability to allow more room for their customers to be able to connect to the net and move data, especially since they are getting close to reaching the limit of what they can provide at the current time.
That’s the simplest explanation that I can come up with. It might not be technically accurate, but you get the picture. If they sat and did nothing, we would have problems in high population areas like New York City where data congestion is a real problem. This will provide immediate relief.
As AT&T scrambles to expand their LTE network, they have to have a good game plan in place to make room for the huge spike in data transfer that will come as a result. When you jump from an average download speed of 1 to 5 Mbps to speeds of over 20 Mbps, that means one thing… people will start using their smartphones to view data heavy video content like never before.
The natural limit to data usage by customers right now is speed. I know that I for one would be watching a lot more Youtube videos and movies on my Samsung Galaxy S2 if the speed was even close to the advertised HSPA+ capability of 14Mbps. Sure, they claim you can surf up to 21Mbps, but that’s not a reality for most areas.
Some of the areas around the country are already running “fake 4G” HSPA+ (it’s really enhanced 3G, or “3.5G”), but it’s not significant. We still don’t have HSPA+ coverage in the Capital City of Missouri. As soon as we do, network usage will spike. If the provider doesn’t have enough bandwidth to meet that demand, download speeds will be choked. That’s why unlimited data for new accounts is no longer a possibility.
I’m one of the lucky ones who has the grandfathered unlimited data plan for my smartphone. But the rest of my family has to live with the 3Gb per month cap. Now that AT&T has purchased an additional range of the spectrum, they can expand without the worry that the network won’t be able to carry the increased load. It’s as simple as that.
Purchasing this additional range will allow AT&T time to continue to develop new ways of jamming more data into the existing network. I think we will see a quantum leap in the future once technology advances to the point that new ways are created to tap into moving more data within the same range of available frequency.
Here’s an excellent example to explain what is going on…
Years ago, we had 33.6 Kbps modems. Next came the 56k modem. We really thought we were doing something great with such amazing data transfer speeds. But at the time, we were tapped out for what amount of data the network could move. That’s when Asynchronous Data Subscriber Line technology took the world by storm.
Instead of moving data over the audible voice range of telephones (remember the loud screeching bleeps an blips you’d hear as your 56k modem would connect?), the ever-so-smart engineers figured out a way to transfer data in a higher frequency range than what they were currently using. That meant you could talk on the phone and surf the internet at the same time, and it wouldn’t disturb voice data transfer.
DSL became the big new thing, and it allowed us to transfer data at speeds of around 1024 Kbps instead of 56k. Talk about a quantum leap! That was a breakthrough which allowed us to move into the era of multimedia data transfer on the internet. In other words, you could download or stream a much higher amount of data than what you could previously.
At the same time, the cable companies figured out that they could also move data over a frequency that did not conflict with the data transfer for cable television. What made it even better was the fact that cable modems could jam more data through the big fat round coaxial wires than DSL. That is still true to this day, and this is why I don’t subscribe to DSL over my cable internet connection.
Once we “tap out” the maximum capabilities for 3G and 4G data transfer, I envision that some genius will figure out a new way to either compress data for higher speeds, or figure out some new breakthrough method of transferring data altogether over the existing network infrastructure. But until that happens, companies like AT&T have to scramble to purchase as much of the available range of frequencies that are licensed by the government to transfer data.
Without getting overly technical, that’s the best way that I can explain it to those that have asked me what this acquisition is all about. Technological advances are moving forward at breakneck speeds, and I believe we will see something huge within the next five years regarding transferring data to your computers, smartphones, and other devices.
In the future, we might be laughing at how we thought we were surfing at such slow speeds that LTE delivers to us today. It’s bound to happen. Even though “experts” say that there is a hard ceiling of what speeds can be forced through the network in the present, they forget to factor in technological advancement into the equation.
It’s kind of funny to me how the AT&T commercials that are now running brag about how instantaneous videos and downloads can be using their new LTE network when they know that the majority of the country cannot access such speeds. In my opinion, they are jumping the gun. Poor folks like us Mid-Missourians might be sadly disappointed when they find that their smartphones can’t transfer big huge videos like they advertise.
But even though they have gotten ahead of themselves with their advertisements that they throw in our faces on a daily basis, I truly believe the best is yet to come. We may arrive at a time in the future when data transfer is instantaneous, and advertising network data transfer speeds will become meaningless to the consumer.
Just my thoughts and my prediction for what the future holds. I think we live in an exciting time indeed.
Are you an expert at bandwidth availability and network data transfer? Here’s your chance to shine. Explain to us all how this really works in the comments section and I might share your insight in a new blog post. Until then, happy surfing!
Carlton Flowers
Forward-Thinking Futurist (and data hog)

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